4 The contract consists of two elements:A) An agreement B) Legal obligation All contracts are agreements, but not all agreements are contracts 13 Indian Contract Act, 1872 13 2. Classification of the contract on the basis of how it is formed a. Expressed contract: The contract is concluded by spoken or written words. b. Implied contract: a contract concluded on the basis of the action of the parties and not by their express, written or oral words. c. Quasi-contract – The contract is concluded by order of the court and not by agreement of the parties 3. Classification of the contract according to the scope of performance a. Contract executed If both contracting parties have fulfilled their respective obligations, the contact is deemed to have been performed. b. Performance contract If one or both of the contact parties still have certain things to accomplish in the future or if there is still something to be done under the terms of the contract, the contract is called an executable contract. 6 Indian Contract Act, 1872 6 6. Legal purpose and consideration 7.

Not expressly cancelled (cancelled) 8. Legal Formalities 10 Indian Contract Act, 1872 10 Acceptance § 2 (b) If a person to whom the proposal is submitted indicates his consent, the proposal is called acceptance. A proposal, if adopted, becomes a promise. Requirements for a valid acceptance 1.By an appropriate person – The right person to accept the offer is the one to whom it is addressed. -The bidder cannot be compelled to be bound in a contract with a person with whom he did not want to be associated. 2..Within the time limit set by the tenderer. (e.B. Advertising for the IPO 6 Free and genuine consent, i.e. free from fraud having an undue influence on false errors of representation The parties responsible for the contract § 11 – is of age, is clear in mind, will not be disqualified from the contract. Legal consideration and object, that is, something in return and which must be lawful. No consideration – No contract (Nudum Pactum) 4 Indian Contract Act, 1872 4 1.

An agreement, a proposal / an offer and an acceptance: Agreement = proposal + its acceptance Must be made by two people, one makes an offer and the other accepts this offer. 2. Intention to establish a legal relationship The Court wants to measure the degree of seriousness. Not all loose conversations, not an exchange of subtleties, not an occasional social engagement, you consider a contact. Essential to a valid contract Indian Contract Act,1872 This is a special branch of commercial law that deals with the rights and obligations of the parties arising from commercial transactions. General introduction to the Treaty. Definition of a contract A contract is an agreement between competent parties based on the actual consent of the parties, 9 Indian Contract Act, 1872 9 5.The offer may be specific or general There must be the destination of the offer. -If the offer is aimed at a specific person, we speak of a specific offer. -If it is intended for the whole world as a whole, it is called a general offer. e.B.

Advertising 6. The offer must be communicated 7. The offer must be distinguished from the invitation to offer the availability of books available for rent in the bookstore. All are examples of invitations to offer. The advertiser may or may not sell this. e.B. the publication of timetables by the railways are examples of expressions of intent. 7 Indian Contract Act, 1872 7 A invites B to dinner in a restaurant.

B accepts the offer. A rents a taxi, but B does not show up. Can A get it back from B? R told S that he would sell his computer to S for Rs. 15000/-. This is a clear offer of R to S. Case agreement = offer + its acceptance 22 quasi-contracts: 1. Claim of the necessities provided to a person who is not able to conclude a contract on his behalf. 2.

Reimbursement of a person who pays the money owed by another person whose payment interests him. 3. Obligation of a person who benefits from a free act. 4. Investigator`s Liability for Lost Property 5. Liability of a person to whom money is paid or an item is accidentally delivered. Insurance = conditional contract. 5 Valid contract § 10To be a valid contract, it must fulfill the following: Agreement – Offer and acceptance Consensus-ad-idem (Meeting of Spirits), that is, people must accept the same thing in the same sense and at the same time. Intention to establish a legal relationship with a social relationship or an illegal/illegal relationship. (Balfour vs. Balfour) Parker Vs.

Clark 14 Indian Contract Act, 1872 14 Both parties make the promise. Bilateral One party makes the promise and the other party can accept by doing something. Unilateral Indian Contracts Act, 1872 Presented to:- Dr. RAJENDRA MISHRA Presented by:- RAJAT REKHI (24-MBA-07) 8 Indian Contract Act, 1872 8 Requirements for a valid offer 1. The offer must be made explicitly or implicitly – Must be made in a way that leaves no doubt about it. proposal in words, the promise is said to be explicit, and the proposal made other than in words is said to be implicit. z.B.B says S: Can you fix my computer? – Express offer A street vendor of photo albums quietly extends a room in front of a passer-by – taking possession of it.- Implicit offer for sale. 2. The tender must intend to establish a legal relationship 3. The offer must be safe and not vague in sense 4.

The offer must be determined and certain within the meaning of 12 Indian Contract Act, 1872 12 1. Classification of the contract according to enforceability: a. Valid contract: Contract that satisfies all the essential elements of a valid contract in accordance with Article 10. (a.b. A contract that is legally enforceable at the choice of one party, but not at the choice of the other party or party, is a voidable contract [§ 2(i)]. c. Invalid Contract: An agreement may be enforceable at the time it is entered into, but later it becomes void and unenforceable for a specific reason for a specific reason. d. Illegal Contract: All illegal agreements are invalid, but not all invalid agreements are necessarily illegal. e.B.

an agreement with minors is void, but not illegal. e. Unenforceable contract: Some contracts become invalid because the court does not execute them due to non-compliance with certain formalities. 8 Valid contract Possibility of performance: The impossibility, whether known to the parties or not, renders a contract invalid. Necessary legal formalities: e.B. deed of sale of real estate. 3 Indian Contract Act, 1872 3 – B invites a friend S to dinner. He makes elaborate preparations. S does not show up for dinner and all preparations made by B are wasted. Since this was a contract between the parties, B cannot sue S to take legal action against him for breaching the obligation to come to dinner. How could you say that the above was not a contract, when it was clearly an agreement between the two friends? 1 Indian Contract Act, 1872 1 Indian Contract Act 1872 2 Indian Contract Act, 1872 2 The term contract in the ordinary sense means an agreement between two persons.

Contract law aims to regulate the conduct of persons who enter into contracts so that a conflict between such persons can be resolved at a later date. Meaning of the contract: § 2 (h) defines a contract: A legally enforceable agreement is a contract. (e.B.C enters into an agreement with D to sell him goods for Rs. 25000. 5 Indian Contract Act, 1872 5 3. Competence of the parties Any person may enter into a contract, with the exception of minors, persons with an unhealthy mind, persons disqualified by another law. 4. Consideration Something in return B promises S that he will buy his bike for Rs.35000. 5. Free consent Understanding of the mind and there is no undue pressure or influence on the conclusion of contracts 9 Classification of contractsFrom the point of view of performance Valid contracts Invalid contracts Cancellable contracts Illegal agreements Inapplicable agreements 23 Execution of contracts:By execution By tendering of the service By mutual agreement: Novation/withdrawal Due to subsequent impossibility By breach: Actual or 14 planned agreements cancelled1. With or by a person incompatible with the contract (p.11) – Invalid from the outset 2.Affected by a mutual error of fact between the parties (p.20) 3.The object of the consideration is illegal.

4.Agreement without consideration (p.25) 5.Agreements restricting trade (p.27) 6.Agreements restricting marriage (p.26) 7.Agreements restricting legal proceedings (p.28) 16 Consent (p.130) Two or more persons should agree if they agree on the same thing in the same direction. . . .

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